Ads urge class action against NAB over US loans

Ads urge class action against NAB over US loans - The West Australian

National Australia Bank shareholders are being urged to join a class action relating to its 2008 heavy losses over toxic US subprime home loans.

Law firm Maurice Blackburn is placing advertisements urging investors in NAB, one of Australia's big four banks, to join the action before the October 12 deadline.

The Supreme Court has ordered the ads be placed in national newspapers and that NAB write to the 230,000 shareholders who held NAB stocks between January 1 and July 25, 2008.

In July, 2008 NAB suffered the biggest drop in its share price since 1987 after it revealed it had lost up to $A1 billion in the US mortgage crisis.

The lawsuit will allege that NAB did not properly disclose to shareholders and potential shareholders the level of its exposure to the toxic US housing debts, said Jacob Varghese, the action's principal lawyer.

"Thousands of investors who bought shares in that period were, we say, misled and suffered losses as a result," he said in a statement.

The bank, like any listed company, was obliged under the Corporations Act to tell the ASX about any information that could impact its share price so investors could make informed decisions, he said.

Two hundred and fifty institutional and retail investors are currently group members in the class action, with a hearing due to be held on Tuesday, September 4.

NAB, in 2006, had bought $A1.2 billion in Collaterised Debt Obligations which were heavily exposed to the US' subprime residential mortgage market which became toxic debt in 2007 and early 2008, Maurice Blackburn said in a statement.

NAB first made a $181 million provision for the CDO exposure in May 2008, then increased it to $1.1 billion sending the share price plunging by nearly $A6.